“Perceptions are what create value”

From the Record:

Will the value of Paramus homes drop?

Tainted soil found at West Brook Middle School months ago has some Paramus homeowners concerned that their property values will drop.

So far, there’s no hard evidence that prices in the neighborhood around West Brook have dipped in response to the pesticide contamination. But those who predict a downswing feel sure that the school district’s tarnished reputation for covering up the contamination can mean only one thing for property owners.

“When people hear stories like that, let’s face it, they’re concerned,” said Gary Siramarco, whose twin daughters attend West Brook. “It’s going to affect property values.”

The public first learned of tainted soil at West Brook in May, about four months after environmental consultant Melick-Tully and Associates alerted school officials to pesticides in the soil at levels 39 times state safety guidelines.

Richard Curran, an independent real estate appraiser, said concerns over property values there are by no means unjustified.

“Perceptions are what create value,” he said. “Is that going to hurt it? Most likely.”

As a real estate appraiser, Curran’s job is to value property based on past sales, not on speculation. He said he does not have recent sales figures on homes in the neighborhood around West Brook, and thus could not make any definitive judgments on property values there.

“We can only compare to the past, not project to the future,” he said. “There’s no way to really tell until someone tries to [sell].”

Paramus Councilman Richard LaBarbiera said he was unaware of any impact on property values. “I don’t know how anybody could draw such a conclusion after such a short period of time,” he said.

He still doesn’t think it will affect people’s perceptions of the town.

“I trust that Paramus will remain a very desirable community in the years to come,” he said.

But the fears remain. Michael Evangel is concerned that property values throughout Paramus will be adversely affected.

“We need to bring back the town’s reputation,” she said. “Everybody’s fearful property values will plummet.”

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236 Responses to “Perceptions are what create value”

  1. Clotpoll says:

    Bad election in Japan yesterday; $$$-Yen cross is back on.

  2. thatBIGwindow says:

    Paramus has nothing to worry about. Their property values are high and their taxes are low. Low taxes = desirable.

  3. gary says:

    Nothing can affect prestigious Bergen County; not contaminated soil, not influx of gang activity, not a raid by New Yorkers who speak languages never heard before, not paint sludge chemicals, nothing. Just keep buying folks…. keeeeeep buying.

  4. RentinginNJ says:

    Ameican Home Mortgage down 41% before the bell.

    “RBC Capital Markets analyst James Ackor said it is not certain the company can survive. As long as the company paid a dividend, investors were being paid to wait, Ackor said. Now, that is no longer the case.”

  5. gary says:

    The market could care less if it goes up or down. Volatility is what the street craves and is how they make their money. Who cares if you throw yourself off a cliff, keep buying and selling and paying those fees. Just one or two more record trading days and Johnny boys bonus will buy that totally renovated Victorian in Ridgewood.

  6. BC Bob says:

    “The risk of owning corporate bonds surged by a record as losses on U.S. subprime mortgages at Germany’s IKB Deutsche Industriebank AG triggered concerns of global market contagion.”

    “Investors are fleeing corporate credit in the fastest selloff in seven years, Barclays Capital said today.”

    “Subprimemania is spilling into the real economy,” said Jochen Felsenheimer, head of credit derivatives strategy at UniCredit SpA in Munich. “IKB’s statement was an end for those who believed this is a derivatives linked problem only.”

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a4CHnE.bPy6s&refer=home

  7. BC Bob says:

    Gary [5],

    The vol is resulting in risk aversion. There will be pain on the street if there are lingering affects in their major profit centers; mbs, derivatives and lbo’s.

  8. twice shy says:

    Today’s Star Ledger contained five full pages of foreclosure notices. It seems the notices have been trending about two or three pages. Maybe there are more at the end of a month, or maybe foreclosures are heading higher.

  9. gary says:

    BC Bob,

    Gotcha. I’m curious to see what the last hour of todays trading day will bring.

  10. bairen says:

    Our friends in the area are DINKS or expecting first child. We keep telling them we are seriously thining of moving to another state. They can’t imagine why. Then we tell them that 2 kids under 5 will cost you 3k a month in daycare. Add another 3k for the pleasure of owning a POS cape with 20% down, plus car payments, silly things like food, utilities, clothes, you are looking at needing at least 160k a year to just tread water. That’s without saving for college, retirement outside 401k, entertainment, vacations.

  11. 3b says:

    garu Johnny bought that renovated Colonial In Ridgewood last year, or the year before that and so on.

    Just how many of these Johnnies do you think there are on “the street”, the number is tiny, and may be even tinier before this eyar is over (layoffs).

  12. 3b says:

    #2 tbw: Paramus prices are going down, with or with out the Westbrook fiasco. There is a huge amount of inventory for sal in the town.

    We can ask the same question fro River Edge/Oradell, as far as the potential break up of the River Dell district. I already know of one case,where a couple who was looking dropped stopped, until that siuation becomes more clear, or is resolved.

  13. HEHEHE says:

    Updated: Trouble in the Debt Markets: Housing Industry Woes Ooze into Commercial Real Estate

    http://www.costar.com/News/Article.aspx?id=6F617F21642F96D8DFF738A8CCC4B8BA

  14. looking in ny says:

    ‘American Home Mortgage woes grow
    The mortgage lender announced problems arising from crumbling subprime market Friday, sees stock plummet in premarket trade Monday.’

    http://money.cnn.com/2007/07/30/news/companies/bc.americanhomemortgage.reut/index.htm?postversion=2007073008

  15. looking in ny says:

    An inspiring anecdote told to me by a family friend –

    A family friend, who lives in a unique and gorgeous stone home in a wealthy area of the Bronx, recounted her experiences to me about how she purchased her home.

    In the early 90’s, she and her husband had a budget max of 270K for a home purchase. She had always loved this home, and when it was up for sale, they went to the open house.

    It was listed at 470K, and they explained their max was 270K.

    Eventually, the house came down to 450K, and then 410K, before it finally sold.
    Or so they thought.

    8 months later, they received a call from their RE agent, saying that the sale fell through, and were they still interested?
    They reiterated that their max budget was 270K.
    The owner needed to sell, and accepted it.
    (The house probably has a ‘value’ today of over 800K)

  16. bi says:

    15#,

    if we use 270K as purchase price, 800K as current value and 15 years as holding period, the return is about 7.5%.

    SP 500 closed at 403 on Jan 2, 1992 and at 1473 at July 27, 2007. The return is 9.0%

    Here we see two things: 1) market timing is not important: your friend got best timing but cannot beat a bad timing – 5% drop in one week. 2) RE is still cheap compared to other assets.

  17. SG says:

    RE is bust for 2007. The inventory keep piling up. I have been keeping track of houses in Central NJ towns since last Oct. Based on my selection criteria, in Oct 2006, I had listing of 220+ houses. The same is true today.

    One other measure, noboday wants to talk about RE at parties anymore.

  18. bi says:

    SG, 17#
    I am not convinced that RE is bust for 2007 from your observation. The inventory did not increase from Oct 2006 to today – i was expecting some increase since more house cames to the market in spring and will be taken out after summer.

  19. Stu says:

    In the long run, equities are a much better investment than RE. Anyone who tells you otherwise is fooling themselves. The only advantage RE has over equities is that you get to live in your investment. On the other hand, I guess one could wear their CROX while they dine on lunch at the Chipotle Mexican Grill.

  20. SG says:

    bi: Comparing to Stocks, the main factor is in RE you have at least 5x levarage. In stocks, even if you play aggrasively, it is normally 1.5x to 2x.

    But because of 5x leverage, it makes more sense to not buy at market peak and loose even 20% value. The losses are also multiple 5x :-(

  21. 3b says:

    You heard it people bi says real estate is cheap, and 2007 was not a bust.Delusion, denial, who knows. It must be nice to live in/on fantasty island.

  22. SG says:

    Whoa !!! bi: market timing is not important

    You are ignoring the Stock bust of 2001? If you bought S&P in 2000 at peak, you are probably just breaking even today.

    I have many friends who would sell today if they can get summer 2005 prices. Most of them are in hole for atleast 100K.

  23. looking in ny says:

    Interesting analysis, and I appreciate the feedback.

    However, more relevant for me is the reality that you never can assume that a house is out of your budget based on list price alone.

  24. SG says:

    If you take a longer view–say 25 years–you’ll find that the S&P 500 has actually stomped the real estate market, from Boston to Detroit to Dallas. From the start of 1980 to the end of 2004, home sale prices increased 247%. A pretty sweet deal, it would seem. Over the same period, however, the S&P 500 shot up more than 1,000%.

    http://www.forbes.com/lifestyle/2005/05/26/cx_sc_0527homeslide.html?thisSpeed=65000

  25. make money says:

    http://news.moneycentral.msn.com/ticker/article.aspx?Feed=OBR&Date=20070730&ID=7245431&Symbol=AHM

    trading halten on AHM. This is not a subprime borrower they only did prime and alt A loans. And mostly Prime.

    Ladies and gentelman this is monumental especially since a third of their loans were made in our backyard.

  26. BC Bob says:

    “Ladies and gentelman this is monumental especially since a third of their loans were made in our backyard.”

    hear,hear.

  27. bi says:

    22#, here we come back to investment 101. maybe better wording is we cannot time the market and we should make better investment by implementing better asset allocation strategies. how do you know RE market must come down 20-30% in next 18 months to appease some renting bears here? I would expect real real estate bubble is yet to come: it will up 100% in next 5 years in certain areas and then start busting.

  28. x-underwriter says:

    He added, “It’s clear now we’re in a liquidity crisis. Any loans that aren’t pure prime are falling in value.”

    Looks like we’re going back to the days of show me your income & asset documentation or I’ll show you the door. It never should have gotten away from that in the first place.

  29. 3b says:

    #28 X- What are you talking about, bi says it will go up another 100% in certain areas in 5 years, and then start bursting.

    You think it will decline to appease some renting ebars here? What is wrong with you? find those “certain areas” and buy now!!!!

  30. 3b says:

    What are you talking about, bi says it will go up another 100% in certain areas in 5 years, and then start bursting.

    You think it will decline to appease some renting bears here? What is wrong with you? find those “certain areas” and buy now!!!!

  31. Rich In NNJ says:

    bi,

    I would expect real real estate bubble is yet to come: it will up 100% in next 5 years in certain areas and then start busting.

    What do you base your 5-year hypothesis on?
    The economy due to..? Higher paying jobs? Income growth from…?

    Rich

  32. lostinny says:

    27 Bi
    You really have to be kidding.

    how do you know RE market must come down 20-30% in next 18 months to appease some renting bears here? I would expect real real estate bubble is yet to come: it will up 100% in next 5 years in certain areas and then start busting.

  33. 3b says:

    #31 Rich Just becasue.

  34. thatBIGwindow says:

    #27: 100% in 5 years? Who will be buying these million dollar capes? Where will the median income people live?

  35. BC Bob says:

    “100% in 5 years”

    Totally ludicrous. Does not even require a response.

  36. pesche22 says:

    well a realtor told me now is a great time
    to buy. never see prices like this again.

  37. lostinny says:

    Yeah it’s a great time to buy for the realtors’ pocketbooks.

  38. 3b says:

    #34 tbe On the side of Rts. 4 and 17?

  39. 3b says:

    I am going out toning and picking up a six pack…… of capes.

  40. njpatient says:

    bi – you should be out levering up and buying, not on hear gabbing away

  41. SG says:

    how do you know RE market must come down 20-30% in next 18 months to appease some renting bears here?

    I am in Central NJ (Somerset county). For most part, the prices are already down 10% to 15% since summer 2005. Don’t look at asking prices or median prices. Both lie the reality. You will always have few bozos overpaying based on 2005 prices. The folks who do good homework and negotiating, are getting good prices even today.

    The bust has not moved to counties near NYC yet. But they will in year or so.

  42. njpatient says:

    “here”, that is…

  43. 3b says:

    #41 sg I dont think it will take a year or so, here we are in August, and inventory in tthe 2 small zip codes that I follow, (Bergen County) is still contuing to grow, and houses that have gone UC earlier, are back on the market.

  44. Jim says:

    More bad news for NJ, if taxes are not high enough already be ready for the tsunami.

    Please read: http://www.dailyrecord.com/apps/pbcs.dll/article?AID=/20070730/COMMUNITIES/707300319/1203

    We must continue to pay through the nose so our teachers and policemen can live the life that they are acustomed to when they retire .

    When does Corzine’s term end?

  45. gary says:

    The bust has not moved to counties near NYC yet. But they will in year or so.

    I’ve heard ancedote after ancedote. Please wake me up if this becomes fact.

  46. RentinginNJ says:

    if we use 270K as purchase price, 800K as current value and 15 years as holding period, the return is about 7.5%.

    SP 500 …The return is 9.0%

    ….RE is still cheap compared to other assets.

    Stocks and RE are a bad comparison. RE has never outpaced the stock market. This doesn’t make it “cheap”.

    A home is more like a bond than pays a monthly coupon. The value in buying a home was never about capital appreciation (up until about 5 years ago), rather it was about this imputed rent dividend (building equity by essentially paying rent to yourself, especially in the later years). As for pure price appreciation, RE in general has roughly kept pace with inflation over the long term.

  47. chicagofinance says:

    Frank Says:
    July 29th, 2007 at 9:02 pm
    #295,
    Sellers are not taking their properties off the market, that’s why you have inventory at all time high, but at the same time you’re seeing a lot of under contract signs. In my neighborhood I am seeing houses being sold for outrageous prices after few weeks on the market. Someone is buying them. Since subprime /dumb money is gone, it’s all real this time.

    Frank: answers
    #1 – UC does not mean closed
    #2 – some people are putting up mega-down payments with condo gains
    #3 – foreign nationals
    #4 – people who have had good 2004, 2005, 2006, and not realizing that 2008 & 2009 is going to look worse than 2001 & 2002.

    There is no question that some people feel flush and they are not subprime/dumb, but that doesn’t mean that they are making timely or risk averse decisions. The “flush” people are very likely in the process of a different type of “flush”.

  48. RentinginNJ says:

    When does Corzine’s term end?

    What’s the difference? He will just be replaced by another tax and spend pro-union liberal.

  49. bi says:

    My post 36# is stuck in moderation. Basically, it gives an example that we are relatively affordable even comparing to our neighbors -canada.

    West windsor, NJ, MLS ID# 5036463

    price: $849,000

    5 Bed, 3 Bath
    3,870 Sq. Ft.
    0.75 Acres

    Edmonton, Alberta, MLS®: E3103764

    price: $810,000

    Bedrooms : 4
    Bathrooms : 2
    Interior Floor Space : 1959.03 sqft
    Storeys : 2 1/2
    Built in : 1914
    Land Size : 403.852 sqmt
    Location : Edmonton, AB

  50. chicagofinance says:

    bi Says:
    July 30th, 2007 at 10:37 am
    15#, if we use 270K as purchase price, 800K as current value and 15 years as holding period, the return is about 7.5%. SP 500 closed at 403 on Jan 2, 1992 and at 1473 at July 27, 2007. The return is 9.0% Here we see two things: 1) market timing is not important: your friend got best timing but cannot beat a bad timing – 5% drop in one week. 2) RE is still cheap compared to other assets.

    bi: I will assume that you are not merely trolling, and I will respond to you at face value. I think that you are using perfunctory and seriously flawed analysis in your calculations. As a result, your conclusions range from specious and dubious, to dangerously wrong.

  51. Stu says:

    #46 RentinginNJ Says:

    if we use 270K as purchase price, 800K as current value and 15 years as holding period, the return is about 7.5%.

    SP 500 …The return is 9.0%
    ———————————————-
    But what is the carry cost on RE vs. equities. Your analysis is flawed if you leave out insurance, maintenance and the dreaded property tax of RE investing.

  52. bi says:

    51#, chi,
    where is wrong? you should be able to point it out since ur SN is somehow related to finance?

  53. RentinginNJ says:

    We keep telling them we are seriously thining of moving to another state. They can’t imagine why. Then we tell them that 2 kids under 5 will cost you 3k a month in daycare./I>

    Same here. We have a 4 month old that is about to go into daycare in another month. With one kid and renting, we can swing it. But over the next 18-24 months, we are going to be looking at buying a house and having a second kid.

    The way things are today, I don’t think we can swing 2 kids in daycare, an outrageous mortgage on a POS cape and property taxes that are ridiculous and still growing.

    We may have to consider a lower cost area (N.C.).

  54. Stu says:

    SN = ?

  55. ac says:

    stu (51),

    These should be accepted as quick and dirty numbers and nothing more. Bear in mind the interest on mortgage tax deductibles which can be significant for higher earners and the tax free real estate profit of up to half a million dollars.

  56. thatBIGwindow says:

    This is a funny one from the MLS general mail:

    “Full Price Offer $369,000 and buyer receives 2000 Suburu Legacy. Gold w/blk leather interior, 5 disc CD, sunroof… Condo must sell. Owners leaving the country!”

    A free 7 yr old Subaru! Wow!!

  57. Duck says:

    testing

  58. Duck says:

    ““Full Price Offer $369,000 and buyer receives 2000 Suburu Legacy. Gold w/blk leather interior, 5 disc CD, sunroof… Condo must sell. Owners leaving the country!”

    A free 7 yr old Subaru! Wow!!”

    That is nothing. Buy my house for full asking price and I will give you 2 couches with dog puke on them (no, not the red leather one) and a 6 year old Honda that has been in 4 accidents. The market is really bad and I have to offer these incentives to get a buyer. And I am not joking. I would actually offer these items to the buyer if I saw they were reluctant to buy the house.

  59. Duck says:

    #41 bi,

    Is the $810,000 U.S. dollars or Canadian dollars?

  60. bi says:

    60#, it is canadian dollar but it is almost 1:1 now.

  61. Duck says:

    “The bust has not moved to counties near NYC yet. But they will in year or so.

    I’ve heard ancedote after ancedote. Please wake me up if this becomes fact.”

    And after that, the market in Manhattan is going to collapse and people are going to lsoe a fortune. Yeah! Gloom and doom for everyone. And then we will hae a great depression.

  62. Duck says:

    The contamination at the Paramus school wil not affect property values. People have a short memory and will forget about the entire incident within 3 years. People in Edgewater pay in the high 6 digits to live in a condo next door to a toxic EPA superfund.

  63. Duck says:

    “a wealthy area of the Bronx”

    Never knew such a place exists.

  64. x-underwriter says:

    3b Says:
    July 30th, 2007 at 11:18 am

    You think it will decline to appease some renting ebars here? What is wrong with you? find those “certain areas” and buy now!!!!

    Yes I agree. People who had to lie to get into a house last year now make substantially more and they can easily qualify for a full doc loan, if they wish. The market if truly a safe place to put you money now. Ignore all this global credit supply problem gibberish.

  65. x-underwriter says:

    Idiot button off now

  66. Clotpoll says:

    Bye (27)-

    And what are the conditions that will generate this 100% run-up in the next five years (Manhattan included)?

    Is it the easy credit, too-cheap current prices or tight inventory?

    [sarcasm off]

  67. Duck says:

    Getting a loan is very easy. I called up numerous places over the weekend to cash out some equity and they were very willing to give me money depsite my marginal credit score. One place offered me $500,000.

  68. skep-tic says:

    Bi–

    I’m sure you know that you picked the 15 yrs that are the greatest period of appreciation in the history of RE. Do you really think these years represent a typical return?

    Conveniently, you also ignore the very high carrying cost of RE relative to stocks, the very high leverage associated with the typical house purchase and the lack of diversification associated with sinking a huge amount of money into a home.

    I am sure you understand the concept of risk-adjusted return and just forgot to mention it.

  69. lostinny says:

    There’s a lot you don’t know about NYC Duck and your comments make that obvious.

    Duck Says:
    July 30th, 2007 at 12:25 pm
    “a wealthy area of the Bronx”

    Never knew such a place exists.

  70. thatBIGwindow says:

    So, where is the wealthy area of the bronx?

  71. Duck says:

    “how do you know RE market must come down 20-30% in next 18 months to appease some renting bears here?”

    Come down 20-30%? Ha! If you want those discounts, you better start moving to North Carolina and buy that pre-fabricated house!

  72. Duck says:

    “So, where is the wealthy area of the bronx?”

    Riverdale is the only place that comes to mind.

  73. lostinny says:

    70-
    Riverdale is one area.

  74. skep-tic says:

    #70

    Riverdale

  75. Duck says:

    “There’s a lot you don’t know about NYC Duck and your comments make that obvious.”

    There is also a lot you don’t know about NYC. I lived in Manhattan for 13 years and moved out only a few weeks before the 9/11 attacks. People in Manhattan spit on the Bronx and to them there is no welathy area. Welathy by whose standards? Bronx standards? Yes, then Riverdale is filthy rich. Wealthy by Manhattan standards? Then Riverdale is middle class.

  76. bi says:

    69#, as AC (56#) pointed out, it is just a quick and dirty number. you will have many many pros and cons to consider when you make a more practical comparison. but overall, renting is no no for long term.

  77. Duck says:

    Riverdale id the only decent part of the Bronx. It is like being inside a fortress in the jungle. I like to comapre it to the Green Zone in Iraq. A safe haven in h**l

  78. Clotpoll says:

    Duck (67)-

    Why’s your credit screwed up?

  79. skep-tic says:

    #76

    I don’t think anyone is arguing against the long-term benefits of homeownership. The argument is against your absurd claims that:

    (1) market timing is not important (you have proved this yourself by selecting the fastest period of appreciation in history for you RE return number)

    (2) RE is “cheap” (based on what?)

    and

    (3) 100% rise in RE prices over the next 5 yrs (no evidence for this either).

  80. bergenbuyer says:

    The bust has already hit eastern counties closer to NYC. I’ve already seen ~15% drops in the “prestigious” Bergen County. I expect another ~15% by the fall.

    We’re seeing it in the stats, but just like anything you need to see it with your own eyes. You need to have looked at and gone into the houses that were selling for $500K in 2005 and now comparable (based on your visual assessment) are selling for low $400’s.

    Get out there and go to an open house and compare to what you saw in 2005, you’ll know what I’m talking about.

  81. john says:

    Here is my tale of what is in store for the market. On my foreclosure database I saw a 5 bedroom 2 bath house on the water in Oceanside Long Island walking distance from the train in foreclosure for 515K where, prior owner paid 665K for two years ago. I am interested and I go. Quickly realize with 12K in taxes and a 4K mortgage with 10% down given the house only rents for $2800, not a good deal. Block has only 10 houses on the side with the canal (that faces literally a auto wrecking yard), anyhow 3459 Westminster is on sale for 675k, 3453, westminster is on sale for 699k and a fourth one is one sale for mid sixes. Get three out of four of the identical houses built same year by same person on the same lot are for sale by Century 21. They took listings for a run down foreclosure at 515K a super mint one at 675K and a train wreck nightmare one at 699K that is 100feet from an identical foreclosure in better shape. Why is that, well the owner of the highest price one is almost bankrupt too and that is how much he needs to get back to cover his loan otherwise he is walking away too. The house in bankruptcy is from a liar loan straw man that was rented where owner did a zero down loan and pocketed rents. Final straw is that little area by train a boatload of liar loans and subprime loans happened where people overpaid for houses with nothing down so there are false comps all over the place. The foreclosure house was never worth the price is sold for, who cares about price when you are not making payments and a sham realtor and sham mortgage broker make more money the higher the price is. A lot of blue collar people in that commerical area by the train chased the market in housing through subprime loans. In fact over there just recently two houses got hit by “jewish lighting” prior to the owner losing it. This unwinding of liar loan and stupidity loans will hit eveyone hard and only a fool buys now. Never buy a house you can rent at least at break even, legallly. Don’t count that mother/daughter crap. Buying a house with tons of false comps and negative cash flow is a fools game. Lets get a year of “real sales” behind us to see what the houses are really worth. FYI, all those houses were worth around 300K in 1999 and rents have been flat. Why they doubled makes no sense. A boat slip is nice, but a view of junk yard kills it.

  82. RentinginNJ says:

    Duck,

    With the subprime window starting to close, how are you going to buy a more expensive place in Alpine with a spotty credit history?

    Sure, you can still go subprime today, but with only a month left in the summer selling season, you are about to miss the boat on selling your place. Who knows what the credit picture will look like next spring. With a massive number of ARMS resetting this fall, next spring will likely bring more inventory and even tighter lending standard.

    By the way, I thought you needed your equity to trade up to the new dream house? I recall you saying that you saying you couldn’t afford to lower your price and still buy your Alpine dream house. Why are you “pulling out equity” on a place you are trying to sell?

    Maybe you need to readjust your sights. There are some nice affordable apartments in North Bergen, as long as they are not too close to the waterfront. You don’t even need to spend money on a moving van, you can probably walk there from your place.

  83. chicagofinance says:

    guan: THE most prestigious and selective private primary and secondary school in NYC is in the Bronx.
    http://www.ecfs.org/

    You embarass yourself.

  84. bi says:

    81#, bergenbuyer,
    > The bust has already hit eastern counties closer to NYC. I’ve already seen ~15% drops in the “prestigious” Bergen County. I expect another ~15% by the fall.

    $1M house will be around 700K by fall?

    please do us a favor posting these listings onece you see them. i am so pleased to know that i can get out my renting basement apartment shortly.

  85. New Investor says:

    #19

    I think “investing” in RE by buying your own residence is not a good investment. However, I disagree that RE in general is an inferior investment as compared to equities. Investing in rental properties can yield phenomenal returns, assuming intelligent investment and management.

  86. lostinny says:

    chifi
    I shouldn’t have fed the troll and you shouldn’t either.
    13 years makes one an expert compared to a life long resident. This reminds me of airmchair anthropology.

  87. lostinny says:

    86 That’s armchair.

  88. Duck says:

    My credit is good enough to get me a regular loan, not a subprime loan. I have a good loan with an excellent interest rate. Pitty it will increase when I sell and buy the POS in Alpine. You guys made a huge mistake by waiting on the sidelines. I have a 5.6% interest rate. Good luck getting that or anything near it today!

  89. Duck says:

    I can’t afford North Bergen. Alpine is a thousand times cheaper!

    http://www.wcicommunities.com/default.asp?pageID=homes_home_type_detail&siteID=79&vid=1000

  90. thatBIGwindow says:

    5.6 is pretty good. 6% was the lowest we could get and we both have perfect credit…and this was in December 2006

  91. Rich In NNJ says:

    bi,

    You’re comparing Alberta, Edmoton CA to West Windsor, NJ USA?
    Why?
    Aside from the fact that what someone ASKS for their home and what it sells for makes your comparision a moot point, the difference in tax stucture alone makes your comparison assine.

    Also, you never answered everyone’s question.
    What is the catalyst for prices rising 100% in “certain areas” in the next 5 years?
    Are you expecting 20% per year for 5 years?
    Also, what areas?

    Rich

  92. john says:

    If you hedge RE like DB did it can be a good investment. Otherwise, it is an illiquid investment that is prone to price swings and unanticpated expenses. Look at the people in Detroit, if they tied up their savings in any type of property in Detroit, commerical, rental, private during the last ten years they would be broke. Even worse there was severe correlation risk. The price of housing depands on the Detroit economy so when they lost their job their house was worthless. Don’t laugh this is exactly what happened in NYC in 1991, people lost their job while their coop and condos fell like bricks at the same time.

  93. SG says:

    Gary: I’ve heard ancedote after ancedote. Please wake me up if this becomes fact.

    I did not believe it first even in Somerset county. Everyone I talked to here always said, we are premier town, lot of high paying Pharma jobs etc… But now I see lot of price reductions and higher inventory compared to 2 years ago. Of course, it would not be apparant looking Realtor.com’s asking prices. From last year the prices really declined in Winter.

    Now as we get closer to NYC, you definitely have more demand and many folks like Duck, who refuse the accept the reality. It does take time. They always point to Manhattan which is a very small volume market.

  94. x-underwriter says:

    Duck Says:
    July 30th, 2007 at 1:26 pm
    I have a good loan with an excellent interest rate. Pitty it will increase when I sell and buy the POS in Alpine.

    What happened to the offer you were going to get 2 weeks ago? Did that fall through?

  95. Mike NJ says:

    Chifin

    I would argue that Regis is the #1 high school in the country, must less NYC

    http://www.regis-nyc.org/

    Pure semantics though.

  96. Rich In NNJ says:

    Re-listed with every price reduction in order to reset DOM

    Park Ridge
    ACT RIVERVALE RD $869,900 2/4/2007
    ACT RIVERVALE RD $839,900 4/12/2007
    ACT RIVERVALE RD $799,000 5/14/2007
    ACT RIVERVALE RD $729,900 6/22/2007
    ACT RIVERVALE RD $699,000 7/30/2007

    Since others make statements as fact I shall try one myself.
    The longer they (seller) stay on the market the more buyers feel there must be something wrong with the home and avoid it like the plague.

    Rich

  97. RentinginNJ says:

    I have a 5.6% interest rate. Good luck getting that or anything near it today!

    Is that a fixed or adjustable rate? Anyway, that goes for you too though. Once you sell, you give up your 5.6% rate and pay current market rates just like the rest of us.

    Of course the downside to buying with a very low rate, is that you tend to pay more because most buyers only care about the overall monthly nut. When you go to sell in a higher interest rate environment, your prospective buyer can’t afford to pay as much because more of their monthly payment budget is going toward interest.

    If the monthly payment were the same, I would actually prefer to pay less on a higher interest rate. You can always refinance interest if rates fall. You are stuck with the principal.

  98. dreamtheaterr says:

    A question for Clot or others who have some insight:

    Where does a first time buyer start their research for mortgage loans and options available? Am I going to pay extra going through these programs either through points or rates, even though these programs may seem ‘subsidized’? Or should I just stick to a regular 30yr fixed, 20% down from a regular lender like a credit union?

    Recent graduates get an extra rebate financing their new cars out of college through the manufacturer’s financing arm. Is there an equivalent in the mortgage industry?

  99. njpatient says:

    #96
    Thanks, Rich.

    Seller looks like a gumshoe that has just been told “Follow that market!”
    “But it’s going down!”
    “I don’t care – follow it! But make sure it doesn’t see you!”

    And so the seller follows the market down, always careful to stay a couple of blocks behind.

  100. Mike NJ says:

    #98

    Start asking questions and don’t stop. You are doing the right thing asking here. I just started calling brokers for rate quotes and getting to know them. I also used an online broker and almost used them to close but at the very end the rates moved down and I was already locked with that broker/lender. I quickly moved to Wells Fargo directly and cut out the middle man to get a great deal at the time (6 1/8 in Oct ’06). My advice is to ask around and talk to as many brokers as you can to get a feel of the overall market and what rates you might be expected to qualify for as well who you can trust. In the end it is a dog eat dog world out there and no once gives two poops about you but yourself. When the rates moved in my favor and I already knew I was “locked” into a rate with a specific internet broker (but not the deal of course) I moved on and found a better rate. You are never locked into a deal until you actually close, remember that!

  101. 3b says:

    #77 Duck There are quite a few nioce areas in The Bronx, your ignoracne, shows yet a ain, you know nothing about Bergen County, or NYC.

    There are areas in the Bronx that I would feel much safer walking around at night, than some areas in prestigious Bergen County.

  102. john says:

    I grew up in da bronx!! Loved “bombing” trains in “da yards”, stealing bikes, starting fires and stripping brass rails over on the GC. Couldn’t have asked for a nicer child “hood”.

  103. x-underwriter says:

    dreamtheaterr Says:
    Where does a first time buyer start their research for mortgage loans and options available?

    Don’t be afraid to have an approval at several lenders as you go into closing on a home. Just before closing, call them up and say what are your rates? Go with the lowest one. You don’t want to be sitting there at closing and have the loan rep start doing herky jerky with you and you only have one bank approval to chose from. As far as programs points, etc, that’s pretty easy to learn about on the internet. The more you learn beforehand, the better off you’ll be

  104. Bystander says:

    Dreamtheatre,

    Agree with Mike NJ. I wish I knew the industry better 3 years ago but I was a naive FTHB. Ask questions about every fee especially any garbage items like commitment fees, application fees or underwriting fees. Don’t pay points, don’t take a prepay penalty. Make sure they wave them. Go to bankrate.com and use mortgage calculator to see the payment differences with quoted rates. Try going to an actual bank and not the brokers (avoid paying the middle man) – usually banks will match what the broker quotes. GET A COPY OF THE ESTIMATED HUD1 a day before closing to make sure see agree with everything. This is the document that matters.

    As far as programs, NJ offers some assistance with FTHB but only at lower income levels (less than $70,000?) and you have to buy in a designated “target zone” meaning a bad urban area.

    Generally, ARM vs. fixed depends on your risk comfort level. If you think are staying in your home for 10 + years then fixed may be better. If you think your income/home value will rise and you want to leave in a couple of years then ARM.

  105. lurkerA says:

    98 – like everyone else is saying, call around to many other lenders and ask them LOTS of questions about fees etc (different lenders call the same fees different things sometimes, so the breakdown isnt as important as the total you’ll be paying). also, dont be afraid to tell one about a better deal another is asking you, they want your business, and you can sometimes negotiate a waived fee, part of a point, etc. also, see if you get any deals from any banks, credit unions you do business with, or if there are any incentives you might get through your employer, etc.

    the gov’t program requires you to own the property for a certain amount of time, and live there for a certain amount of time (dont remember the exact numbers) so be careful if you dont plan to stay in whatever it is youre buying for very long.

  106. chicagofinance says:

    Regis isn’t even the best high school on the Upper East side….

    http://en.wikipedia.org/wiki/Hunter_College_High_School

  107. Rich In NNJ says:

    dreamtheater,

    Here’s a great reference for mortgage information:

    Mortgage Professor’s Web Site

    Rich

  108. chicagofinance says:

    thatBIGwindow Says:
    July 30th, 2007 at 1:30 pm
    5.6 is pretty good. 6% was the lowest we could get and we both have perfect credit…and this was in December 2006

    biggie: guess why???…..if you want to understnad guan, you must put guan in your brain….what would guan do?

  109. lisoosh says:

    John
    “In fact over there just recently two houses got hit by “jewish lighting” prior to the owner losing it.”

    And what exactly is “jewish lighting”?

  110. Jamey says:

    $3k/mo in daycare? That’s ludicrous! Maybe nincompoops shell out that amount, but people with half a clue can do MUCH better, even for “exclusive” academies. My kids both went to a great private daycare/nursery school run by the local Episcopalian church (it’s non-sectarian, btw).

    It’s never cost me more than $2000/month for both kids (I think the total damage never exceeded $1700). A lot of daycare centers reduce tuition for families with more than one kid in school. Then there’s FSA accounts with corporate matching.

    Now, with FSA/matching, and one kiddle in day care, my annual out-of-pocket cost is

  111. chicagofinance says:

    yan: personally, I would just ask Jim and use whoever he recommends

    you know all the tricks, so bear in mind that a broker can be cheaper, but you have to be far enough up their posterior to see their teeth….a well run national operation may be better from the standpoint of policy and practices [cost not withstanding] and ultimately reliability….if so, I would use their central office by phone rather than dealing with idiots on the front lines in the satellites

  112. Jamey says:

    A good, if oversimplistic view of the housing ka-blooey:

    http://haloscan.com/tb/atrios/6002335468054469413

  113. scribe says:

    dream,

    I don’t know much about this, but an acquaintance bought a house in PA in 2002, just prior to the bubble.

    She was in her early 50’s and had just been through a divorce, which had wiped her out, but she had a good job.

    She somehow discovered that she could qualify for a Federal agency mortgage as a first-time buyer – I think it was FHA – with no down payment.

    The combination cost of the mortgage paymet and property taxes were less than her rent so it made sense for her to buy.

    Maybe there are others here who would know more about the Federally guaranteed mortgages for first-time buyers (?)

    I know there have been changes in their rules and reg’s, and didn’t Grim say something about new rules that were coming out in the second or third week of September?

  114. Jamey says:

    Lisoosh (109):

    “Jewish lightning” is how bigoted a*sholes who want to be the life of the party say “arson.”

    It was also the ring sobriquet of Benny Friedloff, a 1930s welterweight prize fighter…**

    (**not really.)

  115. Jamey says:

    Duck (# 62):

    People in Edgewater pay in the high 6 digits to live in a condo next door to a toxic EPA superfund.

    I’ll thank you not to refer to Cliffside Park as a “toxic EPA superfund,” Donny…

  116. dreamtheaterr says:

    Wow, so many invaluable responses. Thanks so much every one. We’re still a bit away from purchasing (I reckon not before 2009), but thought I’d do some research on what options are out there for FTHB, if any.

    Keep the ideas rolling in!

  117. dreamtheaterr says:

    #106, Chifi, do you plan to send Hunter there?!

  118. BC Bob says:

    “We’re still a bit away from purchasing (I reckon not before 2009)”

    dream,

    Now that’s preparation. Just like Eli. If he could only throw the ball?

  119. Robert says:

    test test

  120. Stu says:

    dreamtheaterr,

    When I purchased my 2-family home in 2004, I shopped around like mad for the best deal. Mind you I was going to borrow almost 400,000 so the change in interest rates really affected the monthly payment. Well like you, I started the education early and was very prepared for the headache of the closing that everyone warned me about. Well to make a long story short, there was no pain, no surprises and the closing took 45 minutes. I ended up with a $380,000 fixed 30-year jumbo at 5.5% (bought down 1/4 point from 5.75).
    The best piece of advice on the board is to take your lowest price and keep shopping it. I started and finished with E-Loan, but did comparison shop over 12 other mortgage brokers. The funny thing, Wells Fargo was a full 1% higher than E-Loan, although E-Loan sold my loan to Wells Fargo less than a month after the closing.

    The only new advice I could offer you is to compile the last 2 statements of every asset and liability into a PDF. Add a free credit report and have it available to send to any prospective broker. It shows that they will have less to do to sell you a mortgage and might lower their commission (your interest rate) in return for the ease of the sale. It worked like a charm for me and I didn’t speak once with E-Loan between my rate lock until the day before the closing.

    Good luck and shop, shop, shop. Steer clear of those arms too. When I hear that my folks paid 15% for their mortgage, why sweat the 5, 6 or 7% numbers. All of these rates are historically low. Don’t risk it with a non-fixed rate. Things might get very bad in a few years.

  121. Robert says:

    Simple question – will upside-down housing investors start torching their houses?

    Here’s the choice:

    1) Lose $1,000+ per month in negative cash flow on an asset rapidly declining in value that cannot be sold as there are no more buyers

    2) Burn the place to the ground and collect an insurance payout at the falsely over-appraised value, and walk away with a tidy profit

    Hmmm… wonder what some of these flippers (and even regular folks) are conjuring up today…

    http://housingpanic.blogspot.com/2006/04/simple-question-will-upside-down.html

  122. Robert says:

    The “buyer” who was supposed to make me an offer has an unsold house so that deal blew up in flames.

  123. Robert says:

    3b,

    If you think the Bronx is safer than prestigious Bergen County, why don’t you put your money where your mouth is and buy in the Bronx?

  124. Robert says:

    #97 Renting

    The 5.6% is a 30 year fixed mortgagae.

  125. Robert says:

    So when is the Krazy Kannekt Kondo Krash going to be upon us? $4 million for a kondo in North Bergen does not look like the market is down. Neither does a $2.6 million kondo in Kliffside Park.

  126. chicagofinance says:

    dreamtheaterr Says:
    July 30th, 2007 at 3:11 pm
    #106, Chifi, do you plan to send Hunter there?!

    Must be NYC resident…..he would also have to make the cut.

  127. 3b says:

    #122 Robert: I said PARTS numbnuts

  128. john says:

    Cramer was blasting Real estate outside the NYSE today. Said all the home building stocks are worth ZERO and most will go under, said if you house is underwater by 20% you should just walk away it is totally worthless. Said he sold all his real estate and the last piece he unloaded was a beach house he recently sold for a 200K loss and he feels bad for the idiot who bought it. He said sell everything real estate related. He has videos up on his site.

    Actually the Bronx has more more upside potential than NB and besides all thelightning took place in the 1980s so it should be safe by now.

  129. john says:

    Cool burn baby burn. A empty run down small supermarket for me that was closed for ten years, all steel nothing inside was bought by a guy and he had kids with tons of gas burn it down a week after he bought it and the fire dept demo the whole thing, fire happened at 3am and took down the connected movie theater, plot was now large enough and he sold it to whole foods to make a large supermarket the next month for a 500k gain for three months ownership. Been lots of lightening strikes in empty structures around here. GEEZ I left my Piccasso in the spare bedroom can I have an extra ten million?

  130. Robert says:

    “#122 Robert: I said PARTS numbnuts”

    So then move to the part of the Bronx you feel is safer. Tomorrow night, why don’t you walk around the “safe” parts of the Bronx. Bring a camcorder to record your urban adventure and, if you survive, you can post it on YouTube. If you don’t survive, the tape will be excellent evidence for the police!

  131. john says:

    By the way my friend’s dad in five towns bought tax liens or the “paper” on rent stab properties in the 1980’s and let “JL” strike and the owner would go bankrupt with no rent roll and with the rent stablized folks out he could flip the thing to a coop/condo developer. Oh he lives in a water front mansion and JL is a family tradition they are proud of. That and when they place a bogus tennant in the building to start a rent strike, pay homeless people 20 bucks a pop to sleep in the building or letting vicious dogs in the hallways at night. Buy the paper at 40 cents on a dollar and “push” the owner a bit to get him to go under. At least they were ethical enough not to take life insurance in their name out on the the tennants.

  132. UnRealtor says:

    >”The ‘buyer’ who was supposed to make me an offer has an unsold house so that deal blew up in flames.”
     

    With shrinking inventory and prices rising? That buyer missed out. Raise the price another $50K.

  133. Robert says:

    Stuvyestant is the best public high school in NYC.

  134. njpatient says:

    Another very interesting take on bubbles, this one from the perspective of the credit market, but addressing housing directly. A good read.
    http://www.rgemonitor.com/blog/roubini/208166

  135. njpatient says:

    Jamey #112 – I found that last one via Atrios as well

  136. 3b says:

    129 Robert: You can have an urban adventure in your own delightful Cliffside Park, lots fo gang activity moving into town too.

  137. Robert says:

    I can dump my hosue without committing arson. The retaining wall that holds my house up is beginning to crack to pieces. Once the wall goes, it will trigger a landslide, causing my house to slide down 20 feet and crush anyone or anything in it’s way. If I am in the house, I will die and the hosue will become my tomb. There is one crack I discvered a few months ago that is wide enough for me to put my fist into.

    I have seriously been considering suing the builder, home inspector (who never looked at the wall), and previous owner should the cracking continue.

  138. make money says:

    135 Robert,

    You’ll be fine cause your house will sell by the end of the week.

    If it doesn’t then light a match.Burn the joint down.

    burn baby burn…

  139. scribe says:

    #135 has got to be someone goofing on the troll.

  140. scribe says:

    OK, who is it? :)

  141. twice shy says:

    OK, I’ll bite.

    “Robert”: Wouldn’t it be worth having a structural engineer assess the problem and see if the retaining wall can be reinforced?

  142. john says:

    It is a heck of a lot safer for a white man to walk by himself at night in the Bronx than for a black man to walk by himself in Bergen County

  143. john says:

    RE: Robert Says:
    July 30th, 2007 at 4:31 pm
    Stuvyestant is the best public high school in NYC.

    Bronx High School of Science is better than any school in NJ too. Albert Einstein Hospital in the Bronx in better than NJ hospitals. Arthur avenue has better Italian food than NJ, City Island better seafood than NJ. NJ does not even have a baseball team or good public transportation.

  144. lostinny says:

    This blog has already deteriorated to crap.

  145. Clotpoll says:

    Troll (135)-

    “If I am in the house, I will die and the house will become my tomb.”

    This has happened already. You just don’t realize it yet.

  146. Robert says:

    “biggie: guess why???…..if you want to understnad guan, you must put guan in your brain….what would guan do?”

    guan would buy a house before interest rates go up again. I still have not figured out what guan means. Oh, it looks like you might be losing your famous neighbor CF. Someone on Kannket wrote that Corzine is looking at condos in Jersey City!

  147. Clotpoll says:

    Troll (144)-

    If it’s on Kannekt, it must be true.

  148. Robert says:

    ““Robert”: Wouldn’t it be worth having a structural engineer assess the problem and see if the retaining wall can be reinforced?”

    Not if re-enforcing a concrete wall is going to cost me an arm and a leg. And if buyers see me a work crew re-enforcing the wall that holds the house up, do you think they are going to make me an offer? I think they would run out of the house without looking back, like it is some sort of death trap. I don’t want to do anything that will prevent people from buying my house.

  149. BC Bob says:

    “NJ does not even have a baseball team”

    Don’t dismiss the Newark Bears. Rickey is a former Bear.

  150. BC Bob says:

    “City Island better seafood than NJ”

    Ever been to Atlantic Highlands?

  151. ADA says:

    Clotpoll Says:
    July 30th, 2007 at 5:01 pm
    Troll (135)-

    “If I am in the house, I will die and the house will become my tomb.”

    This has happened already. You just don’t realize it yet.

    now that is hilarious.

  152. BC Bob says:

    “I think they would run out of the house without looking back”

    $1.99,

    Can’t blame that on the wall.

  153. Clotpoll says:

    Troll (146)-

    “…I don’t want to do anything that will prevent people from buying my house.”

    Like disclosing a problem that could end up killing the new owner, or all the people behind your house?

    And I’M the unethical one here?

    You are either the most skillfull troll ever (if that story is a fabrication)…or the dumbest person on Earth (if it’s true).

  154. HEHEHE says:

    Housing slump mirrors dot-com crash
    BY RACHEL BECK | THE ASSOCIATED PRESS

    http://news.enquirer.com/apps/pbcs.dll/article?AID=/20070730/BIZ/307300003

  155. lisoosh says:

    “I don’t want to do anything that will prevent people from buying my house.”

    Like making it habitable, safe and cleaning up the yard?

  156. looking in ny says:

    Wow, just checking in on the board, some really funny comments here!

    Thanks for all the Bronx support. There are lots of pluses about the borough that many are not aware of.

    Didn’t realize my post #15 would elicit the reactions it did. As for all the troll commenting -isn’t whether it happened in the Bronx besides the point?

    OK, gotta go…

  157. Clotpoll says:

    Troll,

    BTW…deliberate omissions of material defects in a property are actionable AFTER closing.

    Those are the only kinds of representations that do not expire at settlement.

  158. lostinny says:

    Clot,
    The house won’t pass inspection so he won’t be able to sell anyway unless the buyers are complete morons. (Insert wiseass comment here.)

  159. twice shy says:

    “I don’t want to do anything that will prevent people from buying my house.”

    Robert,

    A serious structural flaw already exists, which you probably should disclose to potential buyers. A decent home inspector might flag it which will tend to discourage a potential sale. You should at least get an estimate. Not least for your own safety.

  160. Robert says:

    “Like making it habitable, safe and cleaning up the yard?”

    I don’t have to do any of that. I staged the house. I put lipstick on the ugly pig! The house is habitable and I gave in and cleaned up the yard. I heard the fine is $250 so that scared me a little because I thought the fine would be much less. As far as the safety issue, work needs to be done in that area.

  161. BC Bob says:

    “CEOs like Countrywide Financial Corp.’s Angelo Mozilo are claiming that “nobody saw” the deterioration of real estate values coming, and are pointing fingers at others for causing this mess”

    From # 152,(“nobody saw”)

    I guess Angelo wasn’t a reader of this blog back in late 2005, early 2006.

  162. Robert says:

    Mozilo saw the slump. I read that he cashed out all of his stock options. He is full of it.

  163. HEHEHE says:

    So did the Toll Bros.

  164. njpatient says:

    I thought there was no slump, Duck…

  165. njpatient says:

    #152 HEHEHE

    What a pity.

  166. Robert says:

    “A serious structural flaw already exists, which you probably should disclose to potential buyers.”

    Just like the seller disclosed the structural flaw to me? Not to worry, I looked up tax records and the seller of my house is living in Fort Lee so, should I sue, my lawyer will know exactly where to find her. Right now, I am not completely sure whether the cracks are structural or cosmetic problems. Perhaps they are just settlement cracks and there is no major problem to worry about.

  167. Clotpoll says:

    Troll (158)-

    “As far as the safety issue, work needs to be done in that area.”

    Are you Casey Serin?

  168. Clotpoll says:

    Troll (164)-

    I don’t know why I find this so fascinating, but:

    How would you prove the structural flaw existed when you bought the house?

  169. Robert says:

    No, I am Richard J. Kurtz

  170. rhymingrealtor says:

    Clot,

    Of all the times you have made me laugh on this blog, that one cannot be topped.

    If I am in the house, I will die and the house will become my tomb.”

    This has happened already. You just don’t realize it yet

    I have to say, somthing similar popped into my head, you know about being stuck in it, but again your eloquence with words is unmatched.

    KL

  171. Robert says:

    But what if the cracks are just cosmetic? New consturction is prone to settlement cracks. And buyers do not see the cracks as they are on a wall that requires one to walk down the block and walk down a 3 story stair case to get to. Should I sell the house and the buyer sues me down the road, I will bring in other parties: the seller I bought from, the home inspector, and the builder.

    And if the problem is major, doesn’t insurance cover it? Or am I on my own?

  172. reinvestor101 says:

    A refreshing voice of reason here! Welcome to this blog Bi! I must warn you however, what you suggest below is heretical to many here. Prepare yourself for attacks.

    bi Says:
    July 30th, 2007 at 11:06 am
    22#, here we come back to investment 101. maybe better wording is we cannot time the market and we should make better investment by implementing better asset allocation strategies. how do you know RE market must come down 20-30% in next 18 months to appease some renting bears here? I would expect real real estate bubble is yet to come: it will up 100% in next 5 years in certain areas and then start busting.

  173. BC Bob says:

    “And if the problem is major, doesn’t insurance cover it? Or am I on my own?”

    And you thought I was kidding about Clot’s blackbox. Hard to believe in 2007, you are paddling upstream against the current without a blackbox.

  174. BC Bob says:

    170,

    Harry: One time, we successfully mated a bulldog with a Shih-Tzu.
    Mary: Really? That’s strange.
    Harry: Yeah, we called it a bullsh*t.

  175. Robert says:

    Someone has yet to explain to me what a blackbox is. And I mean the other blackbox, not the airplane one. No wise butt comments please.

  176. reinvestor101 says:

    Cute. Real cute.

    Congratulations. You just made my list knocking Pat and Booya Bob out of the top spots. I hope you’re happy now.

    BC Bob Says:
    July 30th, 2007 at 5:45 pm
    170,

    Harry: One time, we successfully mated a bulldog with a Shih-Tzu.
    Mary: Really? That’s strange.
    Harry: Yeah, we called it a bullsh*t.

  177. 3b says:

    #171 reinvestor: If you too subscribe to bi’s theory perhaps you can enlighten us as to where this 100% increase in 5 years is coming from.

  178. Rich In NNJ says:

    Chasing the market down…

    Allendale
    ACT CHESTNUT ST $859,000 7/18/2005
    PCH CHESTNUT ST $834,000 9/20/2005
    PCH CHESTNUT ST $799,000 10/12/2005
    ACT CHESTNUT ST $799,000 1/18/2006
    PCH CHESTNUT ST $749,000 4/11/2006
    ACT CHESTNUT ST $724,500 7/19/2006
    PCH CHESTNUT ST $699,000 7/21/2006
    SLD CHESTNUT ST $690,000 7/30/2007

    Emerson
    ACT PINE DR $639,000 8/19/2006
    PCH PINE DR $599,000 10/3/2006
    ACT PINE DR $559,000 1/6/2007
    SLD PINE DR $515,000 7/30/2007 7/30/2007

  179. Clotpoll says:

    Robert (173)-

    Invest in the airplane-style blackbox. Put it somewhere in your house. It’ll give you- or your survivors- a good account of what happened when your house takes out your neighborhood.

    You need it more than the other type of blackbox. The other kind just helps you figger out number stuff.

  180. ACME Financial Engineers says:

    To Robert – re#173

    Technological advancement in computing power, along with advance mathematics. The use of theoretical mathematical gymnastics that once were limited to NASA or NSA to calculate the universe’s puzzles or help encode or decode encode diplomatic messages using cryptology.

    This combination of mathematical geekness and massive computing power has multiplied and move from Ft.Meade, MD -home to the NSA or Cape Canaveral -seeking the money, to Wall Street.

    In short a black box is generally a very powerful computer set-up and its support staff constantly running (for effect – think the movie “War Game”) calculations with propietary data regarding the changing financial environment and stretching forward in time probabilities of all outcomes. The processed data is used to make decisions on new opportunities.

    If you are good in Math/Computers go to Polytechnic Univ in Brooklyn and they have Masters in Financial Engineering program. 20 or 30 yrs ago, these people would have been at NASA, CERN, Los Alamos, etc. doing something productive for humanity instead of playing with numbers.

    The problems comes with the “hiccups”. Such as the “hiccup” a few years ago with a space probe sent to Mars. They put in the right distance number but in Miles instead of Kilometers so the probe crashed into Mars, after all it was not expecting there.

  181. Clotpoll says:

    BC (172)-

    I’m sending you the bill for a new computer screen (LOL!).

  182. Robert T. says:

    testing

  183. Robert says:

    http://www.geofffox.com/MT/images/wall_collapse.jpg

    Coud this be coming to a street near me?

  184. BC Bob says:

    “Congratulations. You just made my list knocking Pat and Booya Bob out of the top spots. I hope you’re happy now.”

    Does that mean a promotion from the LOD’s to Triple A?

  185. UnRealtor says:

    RE: #152, Housing slump mirrors dot-com crash

    Great article.

    Housing slump mirrors dot-com crash

    BY RACHEL BECK | THE ASSOCIATED PRESS

    NEW YORK — Century 21 Real Estate’s CEO Thomas Kunz may have unintentionally hit the nail on the head when he declared that a “pity party” is gripping the housing industry right now.

    Many recent home buyers are expressing shock that their properties may be worth a lot less than when they bought them.

    CEOs like Countrywide Financial Corp.’s Angelo Mozilo are claiming that “nobody saw” the deterioration of real estate values coming, and are pointing fingers at others for causing this mess.

    And Wall Street seems to only now be waking up to the implications of mortgage securities imploding.

    They all need an education in how markets work. In a perfect world, everyone keeps making money on their investments because values never drop. This is the real world. Things just don’t work that way.

    http://news.enquirer.com/apps/pbcs.dll/article?AID=/20070730/BIZ/307300003

  186. Robert says:

    re: #181

    Even with that wall collapse I do not think it owuld scare buyers away

    First Buyer: THis place is a death trap. THe wall collapsed.

    Second Buyer: But look at the wonderful view of NJ and the Hudson

    First Buyer: YOu are riht, let’s buy this place!

  187. chicagofinance says:

    Robert Says:
    July 30th, 2007 at 5:02 pm
    Oh, it looks like you might be losing your famous neighbor CF. Someone on Kannket wrote that Corzine is looking at condos in Jersey City!

    R: Kannekt posters routinely try to pump up the JC market, as there are myriad members of sales forces desperate to unload inventory.

    The accepted thought about 12 months ago or so was that Corzine was going to move to Maxwell Place when it was completed. However, once the W was announced, he instead chose to buy one of the condos there. It is not confirmed, but it makes the most logic anyway between location, view, and the services that will be available.

  188. chicagofinance says:

    ….assuming he wishes to replicate his ceiling dripping again….

  189. UnRealtor says:

    RE: #170

    Don’t be such a girlie-man.

  190. scribe says:

    YO –

    Someone is parodying the troll! Rather brilliantly …

    #135 – Just exquisite. Captures the tone of voice.

    But this has got to be an imposter as well:

    “I don’t have to do any of that. I staged the house. I put lipstick on the ugly pig!”

    Do you think the real troll would describe his house as an “ugly pig”?

    This is a good one, too:

    “And buyers do not see the cracks as they are on a wall that requires one to walk down the block and walk down a 3 story stair case to get to.”

    Whoever is trolling the troll …take a bow, please.

  191. chicagofinance says:

    Robert Says:
    July 30th, 2007 at 4:31 pm
    Stuvyestant is the best public high school in NYC.

    Trollio: Please pay attention…..

    “….In recent years (classes of 2002 through 2005), nearly 99% of Hunter’s students have gone on to college, and about 25% of these students accept admission into an Ivy League school.

    Hunter students win many honors and awards during their high school careers, including numerous Scholastic Writing Awards. Of particular fame are the winners of the Intel Science Talent Search- the first-place winner in 2005 was Hunter senior David L. V. Bauer (’05), while the 1997 winner was Adam Cohen (’97). In addition, two of New York State’s four 2005 Presidential scholars were Hunter College High School seniors.

    In light of its academic excellence, The Wall Street Journal recently identified Hunter College High School as the top public school in the nation and a feeder to Ivy League and other leading colleges. Newsweek has also stated that Hunter College High School is one of the top public schools with the high performers on the SAT and ACT tests.

    According to the National Center of Education Statistics, the average SAT score (verbal and mathematics) in the 2001-2002 school year was a 1390….”

    chicago here: from my own experience, I would estimate that the top 3/4 of the class would fit into Stuy’s upper quartile easily. My brother graduated from Stuy in 1984 third GPA out of 726.

  192. njrebear says:

    BEARISH CRAMER ON REAL ESTATE

    http://housingdoom.com/2007/07/30/cramer-says-walk-away-from-underwater-homes/

    CRAMER –

    100% default on 2/28s.
    Bulk of resets in october 2007.
    No differentiation between prime and subprime!
    Walk away from your house if your home values fall. (For you Duck)
    We are now in a crisis.
    I SOLD ALL MY REAL ESTATE HOLDINGS!!!

  193. pesche22 says:

    man has this blog gone down hill, in a
    hurry.

    the bronx nice place, only a moron would
    try to compare to NJ.

    Low taxes in Paramoose, wonderful

  194. chicagofinance says:

    bost/clot: I don’t know what is worse…

    #1 Garnett to the Celtics for nothing
    #2 Gimp Castillo taking fastballs behind Reyes [Minaya has to answer Texiera….bozo]

    The Castillo thing is more useless than anything else.

  195. chicagofinance says:

    TROLLS: why you are unwelcomed

    I will openly admit that I prefer discourse here to be a closed society. If you don’t like it get out.

    Groupthink?….go to hell!

    My reasoning……I have my own opinions about how conditions are unfolding. I am here to enhance my perception by having discourse that refines those opinions. I am not here to have an argument with the non-believers. If you do not agree with the general premise – GOODBYE

  196. shopping around says:

    Can someone with MLS access tell me what 2414900 went for?

    Thanks

  197. njrebear says:

    I used to follow yahoo message boards until i noticed trolls who would spam message boards with tons of messages so as to suppress any relevant discussion on topics of interest.

    ‘ignore user’ option would be very helpful.

  198. RentinginNJ says:

    Cramer says:

    – 100% of 2/28 mortgages will default

    – Prices are falling everywhere, no area is immune

    – If find yourself underwater, just walk away, even if you are wealthy.

    http://housingdoom.com/2007/07/30/cramer-says-walk-away-from-underwater-homes/

  199. UnRealtor says:

    Kramer is such a mook.

  200. Clotpoll says:

    BC (182)-

    Uber-dork.

  201. Rachel says:

    #195 – NJBear,

    I totally agree and meant to suggest it last weekend. I felt a little bit greedy to ask of any more from JB, but how nice would it be to have an ignore button for certain people? Ahhhh ;o)

  202. rhymingrealtor says:

    I caught Kramer tonight for just a moment as I was changing to meet someone. He was screaming make sure your insurance is paid up and burn that house down!!!! I stopped for a minute thinking of my old boss at the Insurance agency and then I thought maybe we really have hit bottom since his advice is always so yesterday

    KL.

  203. Clotpoll says:

    kl (201)-

    Naah. Cramer is cutting-edge, compared to Time, Newsweek, USA Today, etc.

    Wait ’til Time’s cover story proclaims the death of RE.

  204. rhymingrealtor says:

    ML#: 2414900
    Addr: 725 MAYWOOD AVE

    Sold: $455,000
    SD: 7/15/2004

    KL

  205. rhymingrealtor says:

    Clot,

    Was it not about 3 months ago he was touting builder stocks. Was that because he was planning on shorting them, hard.

    KL

  206. shopping around says:

    Thanks KL but I must have noted the MLS wrong. Sorry

    26 kroy ct, 07009.

  207. rhymingrealtor says:

    Shopping around,

    That’s a bad MLS # I don’t think that info is what you are looking for if that is the address you were talking about. Please provide address. That house has a history of sales and was sold twice after that, but I went by MLS#.
    Is it a GSMLS #?

    KL

  208. Pat says:

    KL, isn’t it a hoot how people love to hate that guy? I guess nobody but the show figured out that it’s gold to be hated by people who want to prove you wrong.

    Yeah, he was poofing up his hairs over the builders a couple of months ago.

    And the black block HAS TO go in Duck’s bathroom, Clot. It would be superflipperkarma if he was on the toilet when it happened. Flush.

  209. rhymingrealtor says:

    Shopping

    26 Kroy is currently Under contract with an anticipated close of 10/15

    KL
    ( PS) good MLS# I used wrong MLS system.

  210. shopping around says:

    Thanks KL.

  211. Pat says:

    207 black box, that is … so tired I can’t even dance with reinvestor.

  212. RentinginNJ says:

    Wait ’til Time’s cover story proclaims the death of RE.

    Thats’s my signal to buy

  213. Clotpoll says:

    kl (204)-

    I don’t think Cramer is dishonest, or was in any way working a pump-and-dump, when he was touting homebuilders. His only investment vehicle nowadays is a charitable trust that cannot sell short. Honestly, I played TOL, LEN and DHI for some tasty short-term gains late last year when they were veering toward book value. There were some buyable dead-cat bounces before the housing news turned 100% negative.

    However, the writing was certainly on the wall by the first or second week of April, when it became clear there would be no Spring market…anywhere in the US. At that point, Cramer was just puffing a buy-at-book-value play when the HBs’ earnings appeared ready to crater all the way to China. Now, many HBs can’t catch a bid at below book value.

  214. Clotpoll says:

    ChiFi (192)-

    They’re gonna love Telfair in Minnesota…heh, heh, heh.

    Maybe the T’wolves won’t have to hire security for the team. Telfair can probably arm the whole roster.

  215. Robert says:

    Nobody is “trolling the troll.” I aam the one who made those comments, including the ugly pig one. I was being sarcastic.

  216. Richard says:

    200 posts later and it’s the same old repetitive boring commentary on this blog. can’t you people come up with something more interesting than POS cape and prices will drop 15%-25% next year? yawn.

  217. Robert says:

    Time is not going to have a cover story regarding the “death of real estate.” That would get their Coldwell Banker, Century 21, Home Deport, Lowe’s, Countrywide, and Ditech advertisers very angry.

  218. Robert says:

    “can’t you people come up with something more interesting than POS cape and prices will drop 15%-25% next year? yawn.”

    How about POS McMansion and prices dropping 30-40%? Actually, this is so yesterday. zzzzzzzzz

  219. reinvestor101 says:

    Kramer is full of it. He’s nothing more than a loud mouth blowhard and not to be trusted under any circumstances. I can’t stand him. Where the hell does he get off trying the destroy this country’s real estate markets by telling people to walk away from their homes? There’s been no significant decline in home prices only a slight slowing up due to the change in market psychology brought upon this market by people like those who frequent this site.

    njrebear Says:
    July 30th, 2007 at 8:20 pm
    BEARISH CRAMER ON REAL ESTATE

    http://housingdoom.com/2007/07/30/cramer-says-walk-away-from-underwater-homes/

    CRAMER –

    100% default on 2/28s.
    Bulk of resets in october 2007.
    No differentiation between prime and subprime!
    Walk away from your house if your home values fall. (For you Duck)
    We are now in a crisis.
    I SOLD ALL MY REAL ESTATE HOLDINGS!!!

  220. Robert says:

    Prices are not going to drop substantially because sellers will torch their homes. Since the market went bad, I have been hearing a lot more fire engine sirens. And there is now a new phrase that I recently learned: Sell-lord. These are involuntary landlords. People who can’t sell so they rent their houses out instead.

    Perhaps someone with good research skills can locate a chart or graph showing arson rates in the U.S. I am very curious to see if they went up after the market changed. Anybody want to locate one? It would make a great topic for JB to post on the homepage tomorrow.

  221. reinvestor101 says:

    You can dance if you want to. Try dancing away from this site as I’ve requested on numerous times.

    Pat Says:
    July 30th, 2007 at 10:11 pm
    207 black box, that is … so tired I can’t even dance with reinvestor.

  222. Robert says:

    re: 220

    It’s already happening. According to the FBI, arson rates in the United States increased 6.8% in the first half of 2006 compared to the same time in 2005.

    http://www.fbi.gov/ucr/prelim06/index.html

    BURN BABY BURN!

  223. dreamtheaterr says:

    “Richard Says:
    July 30th, 2007 at 11:08 pm
    200 posts later and it’s the same old repetitive boring commentary on this blog. can’t you people come up with something more interesting than POS cape and prices will drop 15%-25% next year? yawn.”

    Want something interesting? Your house will drop 15-25% next year, while Barbara Corcaran will be giving you a lapdance telling you it’s up 15-25%…. that should pique your interest.

  224. Robert says:

    Forget houses, I want one of those Rolls Royces that were directly behind Kramer!

    And prices went up in Manhattan only in the downtown part? Last time I checked, ALL of Manhattan was up.

  225. RentinginNJ says:

    Realtytrac released their new and improved foreclosure stats today, which eliminates th edouble counting problem they double counting.

    – New Jersey ranks 13th in the nation

    – 13,417 properties are in some stage of foreclosure

    – This is a 26% increase from the 1st half of 2006

  226. Robert says:

    Speaking of Barbara Corcoran, you guys MUST read her blog! It is hilarious. Here is an exceprt where she bashes all of the house buying/selling shows on HGTV:

    “At least Lisa LaPorta is an actual designer on “Designed to Sell”; however, I always cringe when they manage to come in two cents under the budget. You know that didn’t happen. Where did they buy those 10 cans of paint for $50? In a back alley at midnight? Every open house is scripted with the same dialogue as well. “Is this the same house?” “We are definitely going to write an offer.” “We would consider buying this house.” Buyers don’t talk like that. Buyers say, “This is overpriced” and “What’s this English guy doing here?”

    Every so often, a casting researcher for HGTV e-mails me. The last time it was for “What You Get For The Money.” She wanted to know if I could refer her to a client who owns a fabulous $300,000 home in a unique and historic Sacramento neighborhood. Did it need to have a roof, I wondered? So I watched the show. Turned out the premise is based on what a homeowner thinks his or her home might be worth – although it’s not for sale. The show should probably be called, “If Pigs Could Fly, I’d Be Rich.”

    http://www.barbaracorcoran.com

  227. scribe says:

    Robert Says:
    July 30th, 2007 at 11:15 pm

    Prices are not going to drop substantially because sellers will torch their homes. Since the market went bad, I have been hearing a lot more fire engine sirens.

    I think I know who this is. The sense of humor comes through – but such perfect pitch!

  228. John says:

    Prices will drop. American Home Mortgage actually had a popular product that combined a 2/28 or a 3/27 with a teaser rate that was an IO that also allowed for neg am of the teaser rate in the first few years. In other words you did not even have to pay all the IO. You could borrow a million bucks for around $1,700 a month in this deal. Now flash forward to today where that loan will reset for a alt a guy that is leveraged into a 30 year at 8%. That loan goes from $1,700 a month to $8,000 a month. But even better the house fell in value so the homeowner has negative 100K equity so the bank wants to see you show up with a check for 100K at the refinance.This is the type of crap AHM has been marketing and is on their books which is why they are getting impaired big time on their mortagage holdings.

  229. John says:

    chicagofinance Says:
    July 30th, 2007 at 8:18 pm
    Robert Says:
    July 30th, 2007 at 4:31 pm
    Actually, big deal, Chaminade High School in Mineola can claim 100% of students have gone on to college since inception. Most CEO alumni of any single high school in the US including CEO of IBM. Saw an article recently where a student roundtrip is 180 miles a day to go to school there. Father said when you live 90 miles from the best high school in the US how can you not make trip.
    which is Stuvyestant is the best public high school in NYC.

    Trollio: Please pay attention…..

    “….In recent years (classes of 2002 through 2005), nearly 99% of Hunter’s students have gone on to college, and about 25% of these students accept admission into an Ivy League school.

  230. 3b says:

    #222 reinvestor; Sounds like you are getting scared grasshopper.

    Do you rreally think that we on thios site are that powerful, that we can change the market perception of real estate.

    Bet you had no rproblem when kramer was talking up the home builder stocks, and don’t forget he did work for Goldman, so he had to be brillant.

    And of course the media for the longest time praised the housing boom, now that this has changed, it is their fault.

    For the lack of a better term, you guys are a bunch of babies.

  231. John says:

    U.S. S&P/Case-Shiller Home Price Index Declined 2.8% in May

    By Bob Willis

    July 31 (Bloomberg) — Home values in 20 U.S. cities fell the most in at least six years as a glut of unsold properties, mounting defaults and higher mortgage rates suggest the housing recession has yet to touch bottom.

    The S&P/Case-Shiller index of home prices in 20 metropolitan areas declined 2.8 percent in May from the same month a year earlier, led by Detroit and San Diego, according to the report issued today by Standard & Poor’s and MacroMarkets LLC. It was the fifth straight year-on-year drop and the biggest decline since the index started in 2001. The drop was less than economists had forecast.

    The declines suggest that housing will continue to hamstring the world’s largest economy, economists say. Sluggish sales and falling prices prompt builders to scale back construction and hinder consumer spending as homeowners are less able to borrow against home equity.

    “We judge the housing slump to be far from over, likely not reaching bottom until the middle of next year,” Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, said before the report. “We expect housing starts to continue to fall through the first quarter of next year, so the drag will continue but it will lessen.”

    The S&P/Case-Shiller index of 10 metropolitan areas fell by the most in at least 16 years in May, today’s report showed.

    Declining residential construction has detracted from overall economic expansion for the last seven quarters, trimming growth by 0.5 percentage point in the second quarter. Falling home prices are affecting consumers, helping to slow spending growth to a 1.3 percent pace in the April-to-June period after the prior quarter’s 3.7 percent rate.

    Home Sales

    Sales of new and previously owned homes fell to a 6.58 million annual pace in June, down 23 percent from their peak in 2005, according to reports last week. Inventories of unsold homes in June were at 4.7 million, close to a record. Housing starts in June were down 36 percent from their January 2006 peak pace of 2.29 million units.

    Fifteen cities showed a year-over-year decrease in prices for the month, led by an 11.1 percent drop in Detroit and a 7 percent decline in San Diego, according to today’s report.

    The biggest increases in home values were in Seattle, where prices rose 9.1 percent, and Charlotte, with a 7 percent gain.

    S&P/Case-Shiller’s 10-city composite index, which has a longer history, declined 3.4 percent in May from a year earlier, the biggest decline since 1991.

    Price Gauges

    The S&P/Case-Shiller index and another gauge by the Office of Federal Housing Enterprise Oversight track individual homes through repeat sales and more accurately reflect price trends than the median prices reported by the government and the National Association of Realtors, economists say.

    The Commerce and Realtors’ price measures can be influenced by changes in the types of homes sold. Higher sales of cheaper homes relative to more-expensive properties will yield figures biased toward the low side.

    Median new-home prices fell 2.2 percent in June from a year earlier, while median existing home prices rose 0.3 percent, according to last week’s reports from Commerce Department and the National Association of Realtors.

    A recovery in housing is being held back in part by a wave of subprime mortgage defaults, which is throwing homes back onto the market and prompting banks to tighten standards for borrowers with poor or limited credit histories. Mortgage lenders are feeling the pinch.

    “We are experiencing home-price depreciation almost like never before, with the exception of the Great Depression,” Angelo Mozilo, chief executive officer of Countrywide Financial Corp., said last week on a conference call after the biggest U.S. mortgage lender reported a 33 percent decline in second-quarter net income due to late loan payments.

    To contact the reporters on this story: Bob Willis in Washington

  232. chicagofinance says:

    Manipulated…ridiculous

    Actually, big deal, Chaminade High School in Mineola can claim 100% of students have gone on to college since inception.

  233. John says:

    Inventories rising. Prices declining. Subprime failures rippling through hedge funds, banks. Home builders’ guidance bleak. Declines expected into 2008 and beyond. The Economist says global housing is “the biggest bubble in history,” fueling stock market speculation.

    Also Chaminade does not send 100% of students directly in college in time of war as many students feel it is an honor to serve their country before attending college. If you count the fact they obmitted those brave men who died at war from the college statistic then you are right they manipulated the data.

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